Too often, innovation is a topic subordinated to science or research policy, or even to development policy. Most S&T policies in the Western Balkans region encourage sustainable support for basic research at higher education and research institutions, for the development of human resources and for cooperation in the framework of the European Union’s RTD Programmes, joint research programmes with the European Science Foundation and bilateral agreements (Dall 2006).
The national innovation system (NIS) in Croatia is a complex, but not fully coherent, set of institutions. The most critical components of the Croatian NIS are the absorption capacity and the human capital, especially regarding quality-control management, the number of researchers in industry, the computerisation of the country, the investment in tertiary education, the number of new scientists in engineering etc. Science policy in Croatia is a standard policy based on a linear model of innovation, in which science is the main driving force behind technology development. In order to create conditions for the sound development of the innovation system, Croatian policymakers will need to follow the objectives of the Lisbon agenda, which requests a shift from conventional science policy towards an integrated and pro-active innovation policy. In other words, the integration of science, industry and technology policy (Svarc, Becic 2006).
Table 5.2: Documents Relevant for Innovation Policy in Croatia (Svarc, Becic 2006) 1996 The National Science and Research Programme
2001 Croatian Programme for Innovative Technological Development (HITRA)
2002 “Croatia Based on Knowledge and Application of Knowledge”
adopted by HAZU
2003 Strategy of Development of the Republic of Croatia in the 21 Century – Science
4 Please see chapter 4.1 for more information on Croatia’s patent activity.
2004 Strategic Plan of the National Foundation for Science 2004-2008
2004 55 Recommendations of The National Competitiveness Council for Increased Competitiveness in Croatia
2006 Science & Technology Policy of the Republic of Croatia 2006-2010 adopted by the Government of the Republic of Croatia 2006 Strategic Development Framework for 2006-2013, adopted
by the Government of the Republic of Croatia
The basis of the Croatian innovation system was laid out in the first “National Science and Research Programme” of 1996, with the main objectives being the establishment of institutional technology infrastructure, adoption of adequate measures, and the development of a programme for technological development.
However, the turning point in innovation policy development came in early 2001, when programmes to promote cooperation between industry and R&D systems were introduced. The national technology policy is based on the “Programme for Innovative Technological Development” (HITRA) adopted in 2001 (see paragraph below). In 2003, the government adopted the “Strategy of Development of Croatia in the 21st Century – Science”, which replaced the “National Scientific Research Programme” of 1996. In April 2004, a Co-operation Agreement was signed between the Ministry of Science, Education and Sports and the Ministry of Economy, Labour and Entrepreneurship, regarding the harmonisation of education policies with the country’s economic needs, and the development of the national innovation system (Uvalic 2006).
The building of the national network of technological centres will require the establishment of business and innovation centres, centres for technology transfer, financial institutions, institutions for planning and control, innovation and engineering associations and other centres of technological excellence (Government of the Republic of Croatia 2005).
HITRA, the Croatian Innovation Technology Development Programme was launched in 2001 by the Ministry of Science and Technology, specifically aimed to support the transfer of technology to new technology-based firms using both financial and non-financial incentives. There are three strategic long-term goals of the HITRA program: the creation of incentive policy measures for technology policy, the creation of a technological institutional structure and the establishment of control mechanisms for innovation and technology policy.
HITRA is especially targeted at public-private partnerships or science-industry cooperation and provides a framework for direct cooperation between entrepreneurs, industry, Croatian higher education institutions and research institutes. The target groups are individuals, legal entities and technology-based companies, all with commercially and technically viable ideas (European Commission 2004). HITRA is being implemented through two complementary sub-programmes - TEST (Technology Research and Development Projects) and RAZUM (Development of Knowledge-Based Enterprises). TEST is designed to support pre-commercial research activities in the development of new products, processes and services, until the design phase is complete. Its main objective is to achieve cooperation between the research and economic sectors. RAZUM is designed to support entrepreneurial projects based on new technologies and higher value-added products (Government of the Republic of Croatia 2005). The Business and Innovation Centre of Croatia (BICRO) is implementing the RAZUM
sub-programme. The most important features of this service are the high professionalism of implementation, the absence of administrative constraints on decision-making, as well as the development of specific knowledge and a network of experts for financing, assessing and managing entrepreneurial projects. Until 2004, BICRO has analysed 70 entrepreneurial projects, 15 of which received financial support (European Commission 2004). Implementation of TEST has been entrusted to the Croatian Institute of Technology (CIT), established in March 2006 under the authority of the Government of the Republic of Croatia. Since the establishment of HITRA, 482 projects have been submitted to TEST, 252 of which received positive evaluation and financial support. To this date, 150 projects have been completed, while 102 are still being financed (CIT 2006).
Overall monitoring of the performance of HITRA is organised through the submission of annual reports to the MSES and the government. In 2001, the government founded an Interdisciplinary Control Group for controlling the use of public resources for the HITRA programme. The budget for HITRA has been steadily increasing, from EUR 7.2 million in 2001, to EUR 11.7 million in 2003 (European Commission 2004).
The introduction of these programmes was a step to modernise the approach to innovation policy in terms of the “Triple Helix” model. This model consists of three basic actors with intertwined actions – the government, higher education institutions and business – working to shorten the time-span between discovery and utilisation. However, the programmes did not manage to strengthen all elements of the model; in particular they failed to promote links between R&D and business. So far, the Croatian National Innovation System has been characterised by a weak industrial R&D sector and a low level of technological capability in the business sector. The implementation of HITRA and its contribution to the development of the Croatian NIS has so far been insufficient (Aralica, Bacic 2005).
Experts from the Institute of Economics in Zagreb have published an in-depth study evaluating Croatia’s innovative capability using the framework of the European Innovation Scoreboard (EIS). According to their findings, Croatia ranks well in comparison to other countries of Central and Eastern Europe, but has not made significant progress in its innovation potential and policy with respect to the European Union. Innovation policy in Croatia has so far been developing under the umbrella of R&D policy, resulting in the relative neglect of innovation policy’s potential to contribute to higher economic growth - it is only in the last few years that the first elements of innovation policy, in the form of technological programmes, have appeared. The significance of innovation policy for the economy has traditionally been better recognised in advanced economies, which have promoted it as the main strategic tool for achieving competitiveness in industry, paving the way to the knowledge-based society. Some indicators of Croatia’s human resource potential (e.g. the share of science and engineering graduates), offer encouraging results, while others (e.g. life-long learning), are totally neglected. While the high-tech service sector in Croatia appears relatively developed, the high-tech manufacturing sector is clearly underdeveloped.
Furthermore, policies have mostly failed to create knowledge – expenditures on R&D, both public and business, are insufficient, while patenting applications made by Croatian residents to the EPO are the lowest among countries of Central and Eastern Europe (Aralica, Bacic 2005). The key problems contributing to
Croatia’s low innovation capacity can be found in the low demand for innovation and technologies, the low investment rates in R&D by the business sector, the poor orientation of R&D towards the business sector, the undeveloped system of technology transfer and undeveloped statistical system, all of which are inappropriate for a knowledge-based society (Government of the Republic of Croatia 2005).
The European Union has eased this transition process by establishing a European Area of Research and Innovation, in an attempt to encourage key interfaces in innovation networks; namely between companies and financial markets, R&D and training institutions, advisory services and technological markets (Aralica, Bacic 2005).
The Croatian government has put the establishment of a modern innovation system among its microeconomic and structural priorities, defining its goal as a system that encourages cooperation among the education and science systems, government institutions and private enterprises, in order to achieve successful technological development. On the national level, a politically independent advisory body – the National Competitiveness Council (NCC) – put the development of innovativeness and technology as one of the top political and economic priorities. The results of the council’s work are embodied in a document entitled “55 Recommendations for Improving Croatia’s Competitiveness”. The council outlined several principles to help the country attain a modern approach to innovation policy which will strengthen the components of innovation capability (absorptive capacity, demand, innovation diffusion and R&D), lead to productivity growth, and strengthen the knowledge component behind new investments (Aralica, Bacic 2005). The general objectives of R&D policies are to restructure the scientific research sector, increase investment in science in order to reach 3% of GDP, financially diversify (increase private sector finance), utilise regional research methods and achieve optimal scientific research through international cooperation.
Regarding the development of an information society, the government of the Republic of Croatia adopted a strategic document in 2002 entitled “Information and communication technology – Croatia in the 21st century”. The document encompasses seventeen recommendations for Information and Communication Technology-related activities (MSES 2006b). During 2006, the government was working intensively on the preparation of the “Strategy of Broadband Internet Access Development and Strategy of Telecommunication Development in Croatia”. In 2005, the “National Programme on Information Security in Croatia”
was adopted, following the adoption of the “Declaration of Principles and Action Plan” (World Summit on Information Society, 2003). Furthermore, the government adopted an “Operative Action Plan 2005-2008” for the successful implementation of the “National Programme on Information Security”
(Government of the Republic of Croatia 2006b).
Dynamic governmental activity was also present in the education sector. The MSES adopted an ‘Education Sector Development Plan 2005-2010’ and a number of support programmes in order to ensure the efficient implementation of the plan, with the assistance of the International Bank for Reconstruction and Development (IBRD). The programme design is built upon four broad pillars that form the basis of the sector reform priorities: Creating Learning Schools,
Improving Management and Leadership, Strengthening Monitoring and Evaluation, and Supporting Regional Development and Innovations. Taking account of the current situation, in terms of the process of globalisation and stabilisation, economic restructuring and the pressures of competition, demographic factors, as well as the need for modernisation and the development of a knowledge-based society and economy in Croatia, there is a clear need for effective changes in the development of the education system. To ensure continuity, new educational policies rely on preserving the fundamental values of Croatian society, while also utilising new guidelines and activities in order to develop the Croatian educational system in line with the state-of-the-art standards of Europe and the rest of the world (MSES 2005a).
The State Intellectual Property Office of the Republic of Croatia drafted a
“National Strategy for the Development of the Intellectual Property System of the Republic of Croatia 2005-2010”, which was adopted by the government in October 2005. By adopting this strategy, the government secured fundamental conditions regarding the level of intellectual property protection, similar to those implemented by the European Union. The strategy should create the grounds for further implementation and development of intellectual property, as one of the key factors of the overall economic, social, cultural and scientific development of the country (SIPO 2006).